Question

Marcy's, Inc., operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2016...

Marcy's, Inc., operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2016 third-quarter report, the company reported Cost of Goods Sold of $9,700 million, ending inventory for the third quarter of $11,300 million, and ending inventory for the previous quarter of $10,500 million.

Estimate merchandise purchases for the third quarter. (Enter your answer in millions.)

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Answer #1

Merchandise purchase can be determined by using following equation

Beginning inventory+Purchase-cost of goods sold = Ending inventory

beginning inventory = previous quarter ending inventory = $10,500 mn

Purchase=??

Ending Inventory = $11,300 Mn

cost of good sold = $9,700 mn

$10,500 mn + Merchandise Purchase - $9,700 mn = $11,300 mn

$800 mn + Merchandise Purchase = $11,300 mn

Merchandise purchase = $11,300mn-$800mn

=$10,500 mn

Thus, merchandise purchases for the third quarter. is $10,500 Millions

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